Seven Things to Know About CBO's Budgetary Treatment of Potential Changes to Fannie Mae and Freddie Mac

Fannie Mae and Freddie Mac were chartered in 1938 and 1970, respectively, as government-sponsored enterprises (GSEs) to ensure a stable supply of credit for mortgages nationwide. Government-sponsored enterprises are private companies created by federal law to fulfill a specific purpose. In the case of Fannie Mae and Freddie Mac, that purpose is to facilitate the flow of funding for home loans by purchasing mortgages from lenders, pooling them into mortgage-backed securities (MBSs), and selling the securities to investors along with a guarantee against most losses from defaults on the underlying loans.

After operating independently for decades, the two GSEs were placed in federal conservatorships in 2008. Since then, they have been controlled by the Federal Housing Finance Agency (FHFA) and effectively owned by the Department of the Treasury. In January 2025, the FHFA announced that it will seek comments on options to end the GSEs' conservatorships.

This report addresses seven key issues that might arise as the Congressional Budget Office estimates the budgetary effects of potential legislation or administrative actions that could result in selling the Treasury's ownership stake in the GSEs and releasing them from government control. In keeping with its standard practices, CBO assesses the federal budgetary and economic effects of proposed policies but does not make policy recommendations.